A U Ltd manufactures and sells a single product, the companys sales and expenses for the month of January 2021 were as follows:

Total (Kshs) Value per unit (Kshs)

Sales 1,200.00 80.00

Less: Variable expenses 840.00 56.00

Contribution 360.00 24.00

Less: Fixed expenses 300.00

Net income 60.00

Required:

(i) What is the monthly breakeven point in units and in shillings? (3 marks)

(ii) What is the total contribution margin at breakeven point? (4 marks)

(iii) How many units would be sold each month to earn a minimum target net income of kshs. 36,000? (10marks)

(iv) Using the original data, compute a companys margin of safety in both shilling and in percentage terms. (3 marks)

(v) What is the contribution margin ratio, if the monthly sales increase by Kshs 16,000? (5 marks)